Real Estate Financing for US Soldiers in Germany
In recent weeks, I’ve successfully financed real estate purchases in Germany for three US soldiers and their families—transactions paid in US dollars. This experience has inspired me to share some insights from my work in southern Germany.
Which German Banks Finance US Soldiers?
My recent experiences prompted me to consult with various banks on this topic. The majority of banks are reluctant to finance active-duty soldiers, military personnel, and veterans who are paid in US dollars. However, for each financing case, I found at least two, and in some cases up to six, banks willing to consider the application. I offer free, non-binding consultations to help you identify which banks, savings banks, and building societies are best suited for your project.
Why Do Many Banks Refuse to Finance US Military Personnel?
The primary reasons are bureaucratic challenges, such as FATCA regulations, and the associated costs. Additionally, some banks simply lack experience working with US military personnel.
How Much Equity is Required?
The equity requirements for US soldiers are similar to those for buyers or developers earning in euros. You must cover additional purchase costs (such as property transfer tax, notary and land registry fees, and any real estate agent commission) with your own capital. Any additional equity will expand your financing options.
What is the Required Net Income?
Due to the currency risk (euro/dollar exchange rate), banks typically consider only 70% to 90% of your income, converted into euros. If your remaining income allows you to comfortably meet your financing obligations after deducting other payments and household expenses, you are well-positioned for approval.
Banks will also assess whether you can afford the financing into retirement. You must submit relevant documents during the application process.
What Documents or Information Are Required?
Document requirements vary slightly between banks. Here’s a list of the essential documents related to your financial and personal situation:
- Last three pay stubs
- Statements for other income and allowances (e.g., disability pension)
- Pension forecasts for all potential pensions (e.g., veterans‘ pension, social security, FERS pension)
- Bank statements from the last three months showing salary deposits
- Your most recent US tax return
- Proof of equity (e.g., bank or investment statements)
- Copy of ID card or passport
- Proof of existing liabilities (e.g., loan agreements)
- Your ITIN (Individual Taxpayer Identification Number)
You will also need to provide documents related to the property and complete various bank forms, such as self-disclosure and data protection information.
Are There Any Special Considerations?
Yes, there are. Here are a few key points I’ve encountered:
- All borrowers must verify their identity in Germany. There are several methods and service providers for this. For one US soldier, neither the „Post-Ident“ nor „WebID“ methods worked, so he completed the identification process at a local bank branch.
- Banks require a German IBAN account for direct debit of future loan installments. Many US soldiers use the Service Credit Union, which has been accepted by the banks I’ve worked with.
- The banks will want to ensure that you understand the loan agreement, which is typically in German.
- Some banks insist on a higher repayment rate of 3%, possibly even 4%.
Are You a US Soldier Seeking Real Estate Financing in Germany?
If you’re a US soldier looking to finance real estate in Germany, feel free to contact me at +4917656923231. I´m your expert for real estate financing – personal, digital & reliable. I promise you support through the whole process. As a german mortgage broker, my services are free of charge to you—the financing bank pays the brokerage commission. While I prefer to advise in German, I am happy to support you in English as well.
